Management Report Outlook Sales and Earnings by Business Segment 
SALES AND EARNINGS BY BUSINESS SEGMENT
We expect good improvements in sales and earnings in 2008 in each of our business segments. The table gives an overview.
The number of dialysis patients worldwide should rise by about 6% in 2008, leading to a continued growth in demand for dialysis products and a higher number of treatments. In 2008, Fresenius Medical Care expects revenues to grow to more than 10.4 billion in US dollars, its reporting currency. For net income, Fresenius Medical Care forecasts US$ 805 to 825 million.
Fresenius Kabi expects its positive operating performance to continue in 2008. The company estimates sales growth of 12 to 15% in constant currency. Organic growth is expected to contribute about 7% to this target. Good growth potential is expected again in the Asia-Pacific region and in Latin America. Based on the positive sales projection, further cost optimizations, especially in production, and an improved product mix, Fresenius Kabi expects to increase earnings significantly. Fresenius Kabi forecasts an EBIT margin of around 16.5%. It is anticipated that the recent acquisitions will initially contribute to Fresenius Kabi’s EBIT at a margin below par, also due to amortization of intangible assets. Adjusted for the recent acquisitions, Fresenius Kabi’s EBIT margin is expected to progress into the range of 16.5 to 17.0%.
Fresenius Helios expects a continued good performance in the hospital operations business. The company forecasts revenue to grow to more than € 2,050 million in 2008. Revenues will also be influenced to a large extent by the first-time consolidation of the newly acquired clinics, especially the Krefeld Municipal Hospitals. EBIT is expected to increase to € 160 to 170 million in 2008, despite the initially negative contribution of the Krefeld Municipal Hospitals. Growth potential is expected above all from further hospital privatizations in Germany.
Fresenius Vamed expects a good performance in 2008 given the excellent order situation. The company expects to achieve sales growth and increase in EBIT of 5 to 10%.
Fresenius Biotech will continue its clinical study program. We expect that the expenditures for our biotechnology projects will lead to negative EBIT of about € -50 million in 2008.
FINANCING
In 2007, we generated an excellent operating cash flow of € 1,296 million. The key driver was our good earnings performance. The cash flow margin was 11.4%. We estimate that this margin will be in the range of 10% in 2008, especially through further earnings improvements.
A key financial target figure for the Fresenius Group is the
net debt/EBITDA ratio. As of December 31, 2007, this ratio
was 2.6. Our mid-term goal is to reach a ratio in the range of
2.5, primarily through earnings improvements and a continued
positive cash flow development. This target is on the assumption that no major acquisition opportunities arise.
Overall, we have a sufficient financial cushion with
substantial unused credit lines under syndicated or bilateral
credit facilities from banks.
| GROUP FINANCIAL TARGETS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Targets 2008 | Fiscal year 2007 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sales, growth (in constant currency) | 8 - 10% | € 11,358 million |
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| Net income, growth (in constant currency) | 10 - 15% | € 410 million | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Capital expenditure | ~ € 750 million | € 705 million | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividend | Profit-driven dividend policy |
Proposal: ~15% per ordinary and preference share |
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